Robert Troy (Longford-Westmeath, Fianna Fail)
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92. To ask the Minister for Finance if the guaranteed income of €12,700 associated with drawing down a private pension early is remaining at the current rate or if it will be reverting to over €18,000; and if there will be changes to this matter as a result of the recent budget or as part of the Finance Bill. [44234/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that an individual in a defined contribution pension savings arrangement has the option, on retirement, of putting the funds accumulated under the arrangement into an Approved Retirement Fund (ARF), subject to conditions.

Where such an individual is under the age of 75 at the time of exercising the option and does not meet the requirement of having a minimum guaranteed pension income for life of €12,700 per annum, he or she is required to set aside an amount of €63,500 (or the remainder of the pension fund if less than €63,500 after taking a retirement lump sum) by investing the amount in an Approved Minimum Retirement Fund (AMRF) or by the purchase of an annuity. The purpose of the AMRF is to ensure that an individual, without the minimum guaranteed pension income for life, has a capital nest egg to provide for the latter years of his or her retirement.

In Finance Act 2011, the minimum guaranteed pension income requirement of €12,700 and the set aside amount of €63,500 were respectively increased to a pension income based on 1.5 times the State Pension (Contributory), which amounted to €18,000 per annum, and a set aside amount of 10 times the annual State Pension (Contributory) rounded to the nearest €100, which amounted to €119,800 or the remainder of the pension fund if less than the increased amount.  

Finance Act 2013 rescinded the 2011 changes on the grounds, among other reasons, that without an appropriate transition period the 2011 changes would have detrimentally affected the plans of many individuals preparing for retirement over the medium term.  The original limits of €12,700 and €63,500 were re-introduced, with the intention, at the time, of examining the restoration of the higher 2011 limits at a later date. In a reply dated 25 June 2015 to Parliamentary Question 25553/15, my predecessor stated that the re-introduction of the higher limits was being examined in the context of the preparations for Finance Bill 2015. In the event, however, Finance Act 2015 did not restore those limits.

I have no plans at this stage to re-introduce the higher guaranteed lifetime pension income or set-aside limits which were initially introduced in Finance Act 2011.